USD/MXN stays pressured at the lowest level in three weeks while taking offers to 16.90 amid early Wednesday. In doing so, the Mexican Peso (MXN) pair ignores the broad US Dollar strength by printing a six-day losing streak amid downbeat options market bias for the pair, suggesting the market’s optimism for Peso.
It’s worth noting, however, that the cautious mood ahead of the preliminary readings of the August month Purchasing Managers Indexes (PMIs) for the US restricts the immediate downside of the USD/MXN pair.
That said, the options market data from Reuters portrays a bearish bias of the USD/MXN pair traders as the one-month Risk Reversal (RR), a measure of the spread between call and put prices, dropped in the last two consecutive days to -0.1100 by the end of Tuesday’s North American trading session. Not only that the daily RR figures are the most negative in the last two weeks.
With this, the weekly RR also braces for the second consecutive negative print, -0.150 by the press time, after snapping a four-week winning streak in the last week.
Also read: USD/MXN drops below 17.0000 on mixed market sentiment, falling US yields
